Flagstar Sells Northeast-Based Commercial Loans to CIT for ~$779M
Flagstar Bancorp, Inc. (NYSE: FBC), (the "Company"), the holding company for Flagstar Bank, FSB (the "Bank"), today announced that, effective December 31, 2012, the Bank entered into a definitive Transaction Purchase and Sale Agreement (the "Agreement") under which a wholly-owned subsidiary of CIT Bank, the U.S. commercial bank subsidiary of CIT Group Inc. (NYSE: CIT) ("CIT"), will acquire a substantial portion of Flagstar's Northeast-based commercial loan portfolio.
Under the terms of the Agreement, CIT will acquire $1.264 billion in commercial loan commitments, $785 million of which is currently outstanding. The loans sold consist primarily of asset-based loans, equipment leases and commercial real estate loans. Flagstar expects that the total purchase price will be approximately $779 million and that a vast majority of the assets will be sold during the first quarter of 2013. The sale is expected to be capital accretive to the Bank.
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